GameStop Confirms to Have Had Lots of New Gaming Customers Due to COVID-19
GameStop presented the Q1 2020 financial results yesterday. In the follow-up earnings call, GameStop CEO George Sherman highlighted a wave of brand new gamers induced by the COVID-19 lockdowns throughout the world.
[...] we saw this early on when the store closures began, between the last couple of weeks of March and going into April, and it really showed up in the form of hardware sales predominantly. I think we mentioned that any game that was launched in this timeframe really did better than expected. And that's on a large scale basis, like Animal Crossing, and then certainly smaller games performed much better as well. We saw a lot of new interest and we saw obviously a lot of hardware purchasing late in the console cycle.
And we know that our core GameStop customer has long since bought second devices and is looking ahead toward the next generation consoles in November. So we're certain that we saw new gamers come in, we don't have any reason to believe that it is a return to gaming, we think that it's net new gaming predominantly. And that shows up for us in terms of loyalty as net new e-mail addresses and net interest.
So it's truly beneficial to us. I mean, anytime that the overall pie gets bigger, we benefit from that, given our market share. So yes, by all means, it's something that we can parlay into conversations with our partners as we look down the road. Certainly our hope would be that we can maintain close contact, build that social interaction with these new GameStop customers, get them deeper and deeper into gaming and have them start looking forward to new consoles as well.
So yes, no doubt. I mean, hardware was a pretty scarce commodity and very, very end of cycle. And then of course the Nintendo Switch, which is still, very, very viable, did amazingly well. As we said, we think we're the largest sellers in the world of that device. And we get them in, we sell them out in 24 hours. So there's still big demand in, which we think is largely attributable to new gamers.
This is a glimmer of hope in the company's otherwise relatively bleak prospects as the gaming industry moves from retail to digital distribution. However, the advent of new gamers (already noted by Activision and Electronic Arts, two of the biggest publishers) could certainly prove to be an unexpected but very welcome boon for GameStop.